Express Q3 sales marginally decline 1 percent

REPORT_ Announcing its results for the third quarter and nine months, Express said its net sales decreased to 497.6 million dollars from 503.8 million dollars in the third quarter of 2013, a decrease of 1 percent. Comparable sales during the quarter, including e-commerce sales decreased 5 percent, compared to a comparable sales increase of 5 percent in last year's third quarter. E-commerce sales rose 11 percent to 79.1 million dollars.

Commenting on the results, Michael Weiss, the company's Chairman and Chief Executive Officer, noted, “For the third quarter, EPS met the higher end of our guidance. We saw an improvement in our merchandise margin and comparable sales were unchanged from the second quarter. Our comparable sales reflected a weakening in our store performance as the quarter progressed that was only partially offset by strength in e-commerce and outlets.”

Gross margin as a percentage of net sales declined 110 basis points compared to last year's third quarter and represented 31.7 percent of net sales. Merchandise margins improved by 30 basis points, with this gain being more than offset by buying and occupancy costs which, as a percentage of sales, rose by 140 basis points compared to last year's third quarter. The buying and occupancy de-leverage was primarily related to the combined impact of lower sales and higher rent and depreciation expenses.

For the thirty-nine week period, net sales decreased 4 percent to 1.4 billion dollars from 1.5 billion dollars in the prior year period. Comparable sales during the period, including e-commerce sales decreased 7 percent, compared to a 3 percent increase in the prior year period. E-commerce sales rose 4 percent to 209.9 million dollars. Gross margin declined to 29.9 percent of net sales compared to 32.5 percent in the prior year period. Merchandise margin declined 20 basis points and buying and occupancy costs as a percentage of sales increased 240 basis points.